Google agrees to pay Italy $334 million in back taxes

Alphabet Inc.'s Google has agreed to pay around EUR306 million ($333 million) in back taxes in Italy, settling one of multiple legal and regulatory battles that have dogged the tech giant in Europe.

The settlement also spells the end of a criminal investigation into Google's tax activities coordinated by the chief public prosecutor in Milan, as well as covering separate disputes covering the periods of 2002-2006 and 2014-2015.

Tax officials said the settlement also launches a process to determine Google's proper taxation level in Italy going forward. Rome alleges Google routed more than EUR1 billion in Italy-based revenue to its office in Ireland, where tax rates are far lower. The company says that it has paid its fair share in France but that it is cooperating with the inquiry.

Days after it emerged that Italian tax agencies were pursuing online retail giant Amazon for taxes worth EUR130m (USD142m), it was revealed that Google will pay a EUR306m (USD335m) tax settlement. Facebook didn't immediately reply to requests for comment.

The U.S. company has previously said it complied with tax rules in every country it worked.

This is "in addition to the corporate tax already paid in Italy for these years", Google said.

The Commission a year ago accused Ireland of helping Apple to artificially lower its tax bill for two decades and ordered the government to claw back a record-breaking €13bn.

The biggest outstanding dispute in Europe concerns a €13 billion tax bill that Ireland was ordered by the European Commission to assign to Apple. The payment was made to cover unpaid taxes in the country from 2008 to 2013.

'This latter point applies the Italian tax code in a way in which the UK's diverted profits tax (unfortunately named the Google Tax) doesn't'.

Meanwhile, the French authorities accused Google of owing €1.6bn in taxes.

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